Does placing employees on furlough prevent the employer from making them redundant?

HM Revenue and Customs (HMRC) guidance for employers on the Coronavirus Job Retention Scheme states that, when the scheme ends, employers will have to decide whether employees can return to work, or if redundancies may be necessary. (An employer would not be required to repay the grant it has received for the employee's wage while they were furloughed.)

Government guidance aimed at employees, Check if your employer can use the Coronavirus Job Retention Scheme, confirms that employers can make furloughed employees redundant during the period of furlough. There is no requirement for an employer to wait until the scheme ends before making redundancies.

Employers must comply with the normal procedural requirements in relation to notice and consultation before making employees redundant.

The latest HM Treasury Direction on the operation of the scheme, published on 25 June 2020, has introduced an element of uncertainty as to whether or not an employee can remain on furlough while under notice of redundancy. The Direction states that it is integral to the purpose of the scheme that amounts paid to an employer are used to "continue the employment of employees". Some commentators have argued that this could mean that a claim cannot be made where the employee has been given notice of redundancy, although this is far from certain and the HMRC guidance on the scheme does not state that this is the case. Further government guidance on this question is required.